Pearse Doherty (Donegal, Sinn Fein)
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125. To ask the Minister for Finance the steps being taken to attract a greater range of banks here to ensure consumers have a choice of banks; and if he will make a statement on the matter. [7584/17]

Michael Noonan (Limerick City, Fine Gael)
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The Government is committed to continuing to work to improve the attractiveness of the Irish market to new entrants. I have said before that open market competition represents the best method of driving better rates, offers and choice in financial services for customers. This can be fuelled both by competition between existing lenders and that introduced by new entrants. In this regard, as part of a range of competition measures agreed with the European Commission under their respective EU-Restructuring plans AIB and Permanent TSB are required to provide funding to a public awareness campaign (such campaign to be facilitated by Ireland through an appropriate state body) to raise awareness and promote customer switching. As such my Department is currently managing a contract for the provision of the first phase of a public awareness campaign which is due to go live on a variety of media channels in Q1 2017. This is being funded in its entirety by the two banks.

In addition, we must be careful that we do not deter new entrants from coming in, meaning that, ultimately, consumers have less choice and will end up paying a higher price or, worse, having no access to credit at any price.

Furthermore, it is worth pointing out that initiatives to improve competition in the market have already been introduced, such as the Strategic Banking Corporation of Ireland. The SBCI continues to make low cost, flexible finance available to SMEs across all sectors of the economy and all regions of the Country. To the end of September 2016, over 10,600 SMEs, operating across all business and economic sectors of the Irish economy, have benefited from €458 million of SBCI loans. 

The Programme for a Partnership Government also sets out a number of important and practical measures which can be taken to improve the position of variable rate mortgage holders. The Competition and Consumer Protection Commission has been asked to work with the Central Bank to set out options for Government in terms of market structure, legislation and regulation to lower the cost of secured mortgage lending and to improve the degree of competition and consumer protection. This work has commenced and draft options are expected to be available for discussion within the coming months. In addition, the Central Bank has commenced a programme of research into switching in the mortgage market which will, inter alia, inform its consideration of the need for a mortgage switching code.

On the subject of competition in this sector, the Deputy will be aware that I welcomed the announcement on 9 February that KBC Group had carried out a strategic review of the bank's operations in Ireland and confirmed its long standing commitment of almost 40 years to the Irish market. I understand that Ireland will be designated as one of the group's core markets, alongside Belgium, Czech Republic, Bulgaria, Slovakia and Hungary. The Bank said that it will pursue a "fully-fledged sustainable growth strategy based on implementation of a 'Digital First' customer-centric strategy." It is worth highlighting that KBC Bank Ireland has 15 branches and provides important competition in the Irish domestic banking market. KBC said that it believes that "Ireland is a sound and attractive market which presents opportunities and in which we wish to play a more active role". I welcome this independent acknowledgement of the progress made under this Government. The bank also referred to "significant improvements in cost competitiveness in recent years, a stronger trend in domestic spending augmented by favourable demographics, a supportive fiscal stance and a favourable borrowing environment" in explaining its reasons for remaining in Ireland.

This is another strong sign of the recovery in Ireland and shows confidence by KBC Ireland in the Irish economy. The fact that KBC is committed to remaining in Ireland ensures continuing competition in the Irish banking market which is good for consumers. Such commitment is also a mark of the recovering market and of its continuing growth potential into the future.